Risk Assessment and Return Analysis

 Risk Assessment and Return Analysis Essay example
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Finance & Accounting
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Risk Assessment and Return Analysis Name: Institution: Risk Assessment and Return Analysis In investment, risk assessment and return analysis are vital elements are central to the payout structures of investment vehicles. The general utility theory asserts that the average investor dislikes risks and prefers investment vehicles with the least possible risk…

Introduction

This paper will provide a comprehensive risk assessment and return analysis of the investment portfolio encompassing investments in Dell, Home Depot, Procter & Gamble, General Electric, IBM bond and Disney. Dell Although the company continues to perform relatively well, Dell is currently competing in a different market in which the company does not have a substantial advantage. Dell thrived in the past because of its product offering as the company concentrated on the sale of desktops that were built on order. Dell sustained low parts inventories to reduce overhead. Furthermore, Dell’s direct sales program gives the company a low cost edge. While this ensures that the company’s profitability remains high, the company does not have cost efficiency. The company will, however, continue to operate profitably thereby deterring risks such as liquidity risks. This means that the return on investments will remain relatively high as long as the desktop sector does not suffer economically. Disney Investing in blue chip companies such as Disney is always advantageous. However, investing in Disney offers relatively low yields on investment but low risks. This is because investing in defensive stocks, in Disney, ensures the investor low volatility with regard to the industry and low prices thereby providing easy buy-out options. ...
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